Nigerian real estate property investments have have become quite prominent in the last few years that they have seemingly become a trend in the business today. But despite the entire range of opportunities available to investors, the process is hardly easy as cake.
The practice of investing in rental properties like Houses For Africa is about as old as land ownership itself. You purchase a property that you eventually rent out. You take on a landlord's role, which means you will be in charge of maintaining the property. To cover the costs, you would charge your tenant a certain amount that is going to give you a good profit at the same time. When you own a rental property, you are guaranteed of a fixed rental income per month or per year. Properties such as Houses For Africa generally appreciate in value as time goes by, meaning your asset as a landlord will increase its value.
Real Estate Investment Trusts
Not a lot of Nigerians have some knowledge of Real Estate Investment Trusts . REITs are a collective investment scheme under the regulation of the Securities and Exchange Commission (SEC), where capital is pooled from investors and he money is used to acquire real estate properties, mortgage loans, or a combination of the two. In this set-up, investors have the ability to hold an indirect interest in real estate on a flow-through basis, with underlying assets' portfolio being managed by professionals whose main job is to maximize investor gains, and it will be as if the property was a direct investment. Like any other stock, REITs are bought and sold on major exchanges.
In land flipping, the investor purchases land and sells it fast for a profit. This may well be one of the smartest ways to earn with real estate, because it returns a big profit while demanding little to no work from the investor. You don't need anything more than your capital, coupled with a good working knowledge of land ownership and the concept of buy-and-sell. With more capital, you can "flip" more properties and increase your profits faster.
Investing in property development is capital-intensive. You must purchase properties in prime areas and put up apartments, commercial buildings and the like, before selling them for huge profits. Property developers in Nigeria typically sell their properties for twice their capital. When it comes to property development, keep in mind that location is critical.
The real estate investments we have mentioned are only a few of the opportunities you will find in Nigeria. There can be a lot of variations under each of these examples. Best of all, Nigeria's real estate investment industry carries huge potential, but as an investor, you have to be careful with your choice, carry due diligence, and strike that perfect balance between cost and benefit.